Oil futures settled higher on Friday, boosted by supply constraints and worries of a Russian attack on neighbouring Ukraine, pushing prices toward their fourth weekly gain despite sources saying China is set to release crude reserves around the Lunar New Year.
Brent crude futures settled $1.59, or 1.9 percent, to $86.06 a barrel, gaining 5.4 percent in the week. U.S. West Texas Intermediate crude gained $1.70 , or 2.1 percent, to $83.82 per barrel, rising 6.3 percent in the week.
China will release crude oil from its national strategic stockpiles as part of a plan coordinated by the United States with other major consumers to reduce global prices.
China agreed to release a relatively bigger amount if oil is above $85 a barrel, and a smaller volume if oil stays near $75 level.
The release of crude stocks will occur around Lunar New Year, which falls on February 1. Meanwhile, analysts said that there has been a bump up in the geopolitical risk factor that is boosting prices as tensions mounted between Russia and Ukraine. Several banks have also forecast oil prices of $100 a barrel this year, with demand expected to outstrip supply, not least as capacity constraints among OPEC and allied producing countries come into focus.
Asian LNG fall
Asian spot liquefied natural gas prices fell last week as demand remained lukewarm amid ample stock levels and a mild temperature forecast, helping to maintain a steady flow of cargoes heading to Europe.
The average LNG price for February delivery into north-east Asia fell to $32.60 per metric million British thermal units, down $1.70 or 4.95 percent from the previous week.
Meanwhile, reasonable stocks in Asia and strong output from U.S. plants are allowing a large amount of U.S. LNG to continue heading to Europe, helping offset lower pipeline flows from Russia.
The Yamal-Europe pipeline that usually sends Russian gas to Western Europe was operating in reverse mode of shipping fuel from Germany to Poland for 25 consecutive days so far.
Pacific LNG freight spot rates fell to their lowest level in nine months at $43,750 per day on Friday, while Atlantic rates fell to $30,250 per day, also a nine-month low, according to analysts.
In the U.S., natural gas futures were little changed on Friday as the market took a break after extreme weather forecast-related volatility earlier in the week. Prices soared 14 percent on Wednesday and dropped 12 percent on Thursday on changes in the weather forecasts.